nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2024‒01‒29
fourteen papers chosen by
Joseph Marchand, University of Alberta

  1. Demand for Personality Traits, Tasks, and Sorting By Brencic, Vera; McGee, Andrew
  2. Nothing Really Matters: Evaluating Demand-Side Moderators of Age Discrimination in Hiring By Dalle, Axana; Lippens, Louis; Baert, Stijn
  3. Education Expansion, College Choice and Labour Market Success By Federica Braccioli; Paolo Ghinetti; Simone Moriconi; Costanza Naguib; Michele Pellizzari
  4. When Protection Becomes Exploitation: The Impact of Firing Costs on Present-Biased Employees By Florian Englmaier; Matthias Fahn; Ulrich Glogowsky; Marco A. Schwarz; Marco Alexander Schwarz
  5. Sick Leave and Medical Leave in the United States: A Categorization and Recent Trends By Pichler, Stefan; Ziebarth, Nicolas R.
  6. Minimum Wages and Racial Discrimination in Hiring: Evidence from a Field Experiment By Alec Brandon; Justin E. Holz; Andrew Simon; Haruka Uchida
  7. Education expansion and income inequality: Empirical evidence from China By Hu, Xiaoshan; Wan, Guanghua; Zuo, Congmin
  8. Labor Market Regulation and Informality By Luiz Brotherhood; Daniel Da Mata; Nezih Guner; Philipp Kircher; Cezar Santos
  9. Socio-economic characteristics as determinants in the job market: The case of Piedmont in Italy (1867–2005) By Calabrese, Matteo; Van Leeuwen, Bas
  10. Inequality of Opportunity and Income Redistribution By Marcel Preuss; Germán Reyes; Jason Somerville; Joy Wu
  11. Promotions and Group Identity By Ďuriník, Michal; Morita, Hodaka; Servátka, Maroš; Zhang, Le
  12. Immigration, monopsony and the distribution of firm pay By Michael Amior; Jan Stuhler
  13. Female Classmates, Disruption, and STEM Outcomes in Disadvantaged Schools: Evidence from a Randomized Natural Experiment By Sofoklis Goulas; Rigissa Megalokonomou; Yi Zhang
  14. Surviving Loss: Coping Strategies among Widow Households in Thai Rural Areas By Saisawat Samutpradit

  1. By: Brencic, Vera (University of Alberta, Department of Economics); McGee, Andrew (University of Alberta, Department of Economics)
    Abstract: In job ads, employers express demand for personality traits when seeking workers to perform tasks that can be completed with different behaviors (e.g., communication, problem-solving) but not when seeking workers to perform tasks involving narrowly prescribed sets of behaviors such as routine and mathematics tasks. For many tasks, employers appear to demand narrower personality traits than those measured at the Big Five factor level. The job ads also exhibit substantial heterogeneity within occupations in the tasks mentioned. Workers may thus sort based on personality-derived comparative advantages in tasks into jobs rather than occupations. In the National Longitudinal Survey of Youth 1997, we confirm that personality sorting based on tasks occurs at both the occupation and job levels. In this sample, however, there is little evidence of task-specific wage returns to personality traits, which would influence the supply of traits to jobs with particular tasks. This may explain why personality sorting based on tasks in the sample is very limited in spite of the correlations between tasks and employers’ demands for traits.
    Keywords: personality; tasks; sorting; job ads; employer demand
    JEL: D22 J23 J24 J33 M51
    Date: 2023–12–29
  2. By: Dalle, Axana (Ghent University); Lippens, Louis (Ghent University); Baert, Stijn (Ghent University)
    Abstract: As age discrimination hampers the OECD's ambition to extend the working population, an efficient anti-discrimination policy targeted at the right employers is critical. Therefore, the context in which age discrimination is most prevalent must be identified. In this study, we thoroughly review the current theoretical arguments and empirical findings regarding moderators of age discrimination in different demand-side domains (i.e. decision-maker, vacancy, occupation, organisation, and sector). Our review demonstrates that the current literature is highly fragmented and often lacks field-experimental evidence, raising concerns about its internal and external validity. To address this gap, we conducted a correspondence experiment and systematically linked the resulting data to external data sources. In so doing, we were able to study the priorly determined demand-side moderators within a single multi-level analysis and simultaneously control multiple correlations between potential moderators and discrimination estimates. Having done so, we found no empirical support for any of these moderators.
    Keywords: ageism, hiring discrimination, heterogeneity, literature review, field experiment, administrative data
    JEL: J71 J23 J14
    Date: 2023–12
  3. By: Federica Braccioli; Paolo Ghinetti; Simone Moriconi; Costanza Naguib; Michele Pellizzari
    Abstract: We study the choice of acquiring STEM and non-STEM college education using variation induced by the proximity to universities offering different types of programs. We adopt a novel methodology allowing the identification of the distribution of response types and treatment effects in a multiple unordered discrete choice setting (Heckman and Pinto, 2018). The empirical analysis is based on confidential survey data for Italy, combined with administrative information about the founding dates of all Italian universities and faculties. We find that most compliers are women at the margin of choosing STEM education versus not going to college. We simulate the effects of expanding the supply of STEM education and discover that, in addition to substantial effects on employment, the gender disparity in STEM education could potentially decrease by up to 20%.
    Keywords: monotonicity, returns to education, STEM, instrumental variables
    JEL: I23 I26 I28 J31
    Date: 2023
  4. By: Florian Englmaier; Matthias Fahn; Ulrich Glogowsky; Marco A. Schwarz; Marco Alexander Schwarz
    Abstract: Employment protection harms early-career employees without benefitting them in later career stages (Leonardi and Pica, 2013). We demonstrate that this pattern can result from employers exploiting naïve present-biased employees. Employers offer a dynamic contract with low early-career wages, an unattractive intermediate qualification stage, and high end-of-career wages. Upon reaching the qualification stage, present-biased employees exchange future wages for immediate rewards on an alternative career path – a choice unanticipated by their previous, naïve, self. Thus, employers never pay high future wages. Firing costs help employers indicate that they will not oust employees instead of making promised payments, enabling early-career wage cuts.
    Keywords: employment protection laws, present bias, dynamic contracting
    JEL: D21 D90 J33 K31 M52
    Date: 2023
  5. By: Pichler, Stefan (University of Groningen); Ziebarth, Nicolas R. (ZEW)
    Abstract: This article reviews the current debate about sick pay mandates and medical leave in the United States. The United States is one of three industrialized countries that do not guarantee access to paid sick leave for all employees. We first provide a categorization of the different paid leave concepts such as sick leave, medical leave, or temporary disability insurance, both in a domestic and an international context. Then we use data from the National Compensation Survey to sketch employee coverage rates by type of job. We also document changes since 2010, focusing on paid sick leave. Although gaps in access have decreased over the past decade, we still find large inequalities in access to paid sick leave: While overall coverage increased to 78% in 2023 from 64% in 2015, about half of all part-time employees, employees in the bottom quarter of the wage distribution, and employees in the accommodation and food industry still have no access to paid sick leave benefits. In the last part, we discuss implications of the lack of access to paid sick and medical leave benefits. Moreover, building on international research findings and experiences, we discuss what a possible integration, coordination, and expansion of the co-existing programs could look like.
    Keywords: sick pay mandates, sick leave, medical leave, paid leave, inequality, employer mandates, fringe benefits, moral hazard, unintended consequences, labor costs, National Compensation Survey (NCS)
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2024–01
  6. By: Alec Brandon (Johns Hopkins University); Justin E. Holz (University of Michigan); Andrew Simon (The University of Chicago, Australian National University, Research School of Economics); Haruka Uchida (University of Chicago)
    Abstract: When minimum wages increase, employers may respond to the regulatory burdens by substituting away from disadvantaged workers. We test this hypothesis using a correspondence study with 35, 000 applications around ex-ante uncertain minimum wage increases in three U.S. states. Before the increases, applicants with distinctively Black names were 19 percent less likely to receive a callback than equivalent applicants with distinctively white names. Announcements of minimum wage hikes substantially reduce callbacks for all applicants but shrink the racial callback gap by 80 percent. Racial inequality decreases because firms disproportionately reduce callbacks to lower-quality white applicants who benefited from discrimination under lower minimum wages.
    Keywords: minimum wage, correspondence study, racial discrimination
    JEL: J23 C93 J71 J15
    Date: 2023–11
  7. By: Hu, Xiaoshan; Wan, Guanghua; Zuo, Congmin
    Abstract: Education has long been perceived as a great equalizer, but even with universal rises in schooling years, income distribution worsened world-wide. We propose a method for decomposing the contribution of a variable to the change in inequality into mean, dispersion, and price components. The proposed method is then used to investigate the roles of the education variable in driving down China's wage inequality between 2010 and 2018. We find that (1) education accounted for over 30% of total wage inequality in 2010 and 2018; (2) 70% of the overall decline in wage inequality from 2010 to 2018 can be attributed to education expansion, and (3) the 70% inequality-reducing effect was made up of 95% benign dispersion and price components and 25% malign mean component. The benign components are attributable to an improvement in educational equity and a decrease in the college premium.
    Keywords: Education Expansion, Wage Inequality, Rate of Return to Education, China
    JEL: I24 I26 J31
    Date: 2023
  8. By: Luiz Brotherhood (Universitat de Barcelona & BEAT); Daniel Da Mata (Sao Paulo School of Economics-FGV); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Philipp Kircher (Cornell University); Cezar Santos (Inter-American Development Bank & CEPR)
    Abstract: This paper investigates informal employment in Brazil’s highly regulated labor market, focusing on the intensive margin of informality within formal firms. Using a comprehensive dataset of labor audits conducted from 1997 to 2012, we find that formal firms caught with informal workers face sustained slower growth. Informal workers are found across firms of all sizes, and their characteristics closely resemble those of formal employees. Building on these empirical findings, we develop a dynamic general equilibrium model where firms balance the flexibility of informality against potential costs. Our framework can be used to explore government policy implications and to examine the impact of audit strategies on informality, output, and workers’ welfare.
    Keywords: Informality, labor market regulation, firm dynamics, developing countries.
    JEL: H2 J1 J2 L1
    Date: 2023–12
  9. By: Calabrese, Matteo; Van Leeuwen, Bas
    Abstract: In Modernization Theory, it is argued that both the socio-economic background and education level of labourers affect the job market. In this article, we analyse the effects of both factors on the job market of Piedmont, a region in the north-west of Italy, using a new dataset of job-offer advertisements (job ads) from the newspaper La Stampa between 1867 and 2005. In line with Modernization Theory, we find that the number of job ads mentioning job-unrelated factors (e.g. ‘family background’) as a requirement for hiring, declined over the years. Yet, when present in the text of the job ads, job-unrelated characteristics increased the probability of ending up in jobs with a lower occupational status. However, contrary to job-unrelated factors, the frequency of mentions of socio-attitudinal characteristics (e.g. the ‘ability to deal with the public’) increased over time in the job ads while contributing to the probability of ending in jobs with higher occupational status.
    Keywords: Italy, Piedmont, job ads, newspaper, La Stampa, job characteristics
    JEL: J24 J28 N33 N34 N83 N84
    Date: 2023–11–30
  10. By: Marcel Preuss; Germán Reyes; Jason Somerville; Joy Wu
    Abstract: We examine how redistribution decisions respond to the source of luck when there is uncertainty about its role in determining opportunities and outcomes. We elicit redistribution decisions from a representative U.S. sample who observe worker outcomes and whether luck could determine earnings directly (Şlucky outcomesŤ) or indirectly by providing one of the workers with a relative advantage (Şlucky opportunitiesŤ). We Ąnd that participants redistribute less and are less responsive to changes in the importance of luck in environments with lucky opportunities. We show that individuals rely on a simple heuristic when assessing the impact of unequal opportunities, which leads them to underappreciate the extent to which small differences in opportunities can have a large impact on outcomes. These Ąndings have implications for models of redistribution attitudes and help explain the gap between lab evidence on support for redistribution and inequality trends.
    Keywords: Income inequality, demand for redistribution, fairness ideals
    JEL: C91 D63
    Date: 2024–01
  11. By: Ďuriník, Michal; Morita, Hodaka; Servátka, Maroš; Zhang, Le
    Abstract: How does group identity influence promotion decisions and what impact does it have on the performance of organizations through promotions? We provide answers based on two experiments in which we identify the effect of group identity on the employers’ preferences regarding whom to promote, their expectations of the post-promotion effort of promoted and non-promoted workers, and the post-promotion effort itself. In both experiments, we find strong evidence of group identity biasing the employers’ preferences. The observed group identity bias in the promotion decision significantly reduces efficiency. Contributions to the literature on promotions in organizations and discrimination in promotions are discussed.
    Keywords: Group identity, in-group favoritism, post-promotion effort, post-promotion productivity, promotion decision
    JEL: C91 J7 M50
    Date: 2023–11–30
  12. By: Michael Amior; Jan Stuhler
    Abstract: We argue that the arrival of immigrants with low reservation wages can strengthen the monopsony power of firms. Firms can exploit "cheap" migrant labor by offering lower wages, though at the cost of forgoing potential native hires who demand higher wages. This monopsonistic trade-off can lead to large negative effects on native employment, which exceed those in competitive models, and which are concentrated among low-paying firms. To validate these predictions, we study changes in wage premia and employment across the firm pay distribution, during a large immigration wave in Germany. These adverse effects are not inevitable and may be ameliorated through policies which constrain firms' monopsony power over migrants.
    Keywords: immigration, monopsony, firms
    Date: 2024–01–04
  13. By: Sofoklis Goulas (Brookings Institution, Washington DC, United States); Rigissa Megalokonomou (Monash University, Monash Business School, Department of Economics, Australia, University of Queensland, IZA, and CESifo); Yi Zhang (University of Queensland, School of Economics, Australia)
    Abstract: Recent research has shown that females make classrooms more conducive to effective learning. We identify the effect of a higher share of female classmates on students’ disruptive behavior, engagement, test scores, and major choices in disadvantaged and non-disadvantaged schools. We exploit the random assignment of students to classrooms in early high school in Greece. We combine rich administrative data with hand-collected student-level data from a representative sample of schools that feature two novel contributions. Unlike other gender peer effects studies, a) we use a rich sample of schools and students that contains a large and diverse set of school qualities, and household incomes, and b) we measure disruption and engagement using misconduct-related (unexcused) teacher-reported and parent-approved (excused) student class absences instead of self-reported measures. We find four main results. First, a higher share of female classmates improves students’ current and subsequent test scores in STEM subjects and increases STEM college participation, especially for girls. Second, a higher share of female classmates is associated with reduced disruptive behavior for boys and improved engagement for girls, which indicates an increase in overall classroom learning productivity. Third, disadvantaged students—those who attend low-quality schools or reside in low-income neighborhoods—drive the baseline results; they experience the highest improvements in their classroom learning productivity and their STEM outcomes from a higher share of female classmates. Fourth, disadvantaged females randomly assigned to more female classmates in early high school choose college degrees linked to more lucrative or prestigious occupations 2 years later. Our results suggest that classroom interventions that reduce disruption and improve engagement are more effective in disadvantaged or underserved environments.
    Keywords: gender peer effects, natural e, classroom learning productivit, quasi-random variation, disadvantaged students
    JEL: J16 J24 I24 I26
    Date: 2024–01
  14. By: Saisawat Samutpradit
    Abstract: This study investigates the impact of the death of the primary earner of the household on the labor supply decision of the remaining household member in rural areas, in contrast to literature which often focuses on more developed societies with complete public insurance coverage. We found widow households could maintain the same level of consumption with only a temporary decline in savings. They achieved this by taking over the household business and receiving support from children and other relatives who moved in to assist, with the responsibility falling on daughters rather than sons. On the contrary, widowers withdrew from the labor force after the death of their wives. The di erence in responses could be explained by the income gain to the remaining household members. Widows also experienced a rise in gift income and a decrease in public transfer.
    Keywords: Family structure; Labor supply; Elderly population
    JEL: J12 J14 J22 I31
    Date: 2024–01

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